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CBRE Releases 2017 Salt Lake City Real Estate Market Outlook

Report Includes an Overview of a Robust Market in 2016, As Well As Favorable Projections for the Coming Year

Salt
Lake City—March 13, 2017—CBRE has
released its annual Salt Lake City Real Estate Market Outlook report. The
publication highlights the performance of the local commercial real estate
market during 2016 and provides insights into expectations for the year to
come.

“2016 was another great year for commercial real
estate,” stated Mark Bouchard, senior managing director. “All service lines saw strong levels of user
activity and absorption levels remained positive throughout the year. Though
vacancy increased slightly in the office and retail sectors—mainly due to high
levels of construction completions—the strong demand and elevated levels of
development experienced in 2016 are expected to continue into the new year.”

Some of the key findings highlighted in the report
include:

ConstructionIn 2016 office, retail, industrial, and residential
development continued at elevated levels.

Closing out the year with
nearly 3.7 million sq. ft. of commercial space constructed, 2016 marked the
third time post-recession that annual deliveries surpassed 3 million sq. ft.

Strong job growth most
directly supported the multifamily and office markets; in 2016 the local office
market saw its highest level of completions in over 15 years, reaching a total
of 1.2 million sq. ft. of newly constructed office space.

Supply and DemandElevated construction levels in 2016 were matched by
strong demand from both local businesses and out-of-state investors.

In 2016, the flow of
out-of-state dollars into Utah continued, driving up investment sale volumes and
supporting demand for a variety of commercial real estate services.

Looking forward, the
pipeline of tenants entering or expanding in the market appears to be strong.
However, the balance of such demand with new supply should be monitored
closely.

Economic ConsiderationsAs in all markets, commercial real estate in Salt Lake
is tied to the broader economic environment. As such, there are a number of
local and national factors that have the potential to impact commercial real
estate performance during 2017.

Utah unemployment rates
reached a post-recession low of 3.1% in 2016. With a low supply of labor in the
local market, in-migration is becoming increasingly important to sustain
current levels of economic growth. Strong job growth is again projected in 2017,
supporting continued commercial expansion.

Issues with labor supply
and increasing material costs have directly impacted the construction industry,
leading to rising construction costs. This is expected to continue through
2017.

2017 should usher in a more
active fiscal policy in the U.S., potentially resulting in a stimulative
economic effect over the short- to mid-term. But strict stances on trade and
immigration policy could have a long-term negative impact on commercial real
estate.

“Favorable economic conditions during 2016 allowed the
local market to continue its growth-run despite being more cyclically advanced.
Looking ahead, the marketplace is even more complex, but key fundamentals
remain in place for another year of healthy expansion and positive performance
across Salt Lake’s commercial real estate market,” Bouchard concluded.

Click here to download a copy of the 2017 Salt Lake City Real Estate Market
Outlook

About CBRE
Group, Inc.CBRE Group, Inc. (NYSE:CBG), a
Fortune 500 and S&P 500 company headquartered in Los Angeles, is the
world’s largest commercial real estate services and investment firm (in terms
of 2015 revenue). The Company has more than 70,000 employees (excluding
affiliates), and serves real estate owners, investors and occupiers through
more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic
advice and execution for property sales and leasing; corporate services;
property, facilities and project management; mortgage banking; appraisal and
valuation; development services; investment management; and research and
consulting. Please visit our website at www.cbre.com.​​​​